The paper looks to identify “compensation practices where support for change is the greatest”, and to help investors “target initiatives for improved pay practices and provide useful input for structuring their voting policies”. At the same time, it also provides practical insights and recommendations for all companies, but particularly for those that did not achieve strong investor support or with failed say-on-pay votes.

processes by which investors evaluated executive compensation programs and the extent to which they relied on analyses and recommendations from proxy advisory firms; and

factors that motivated investors to vote against executive compensations programs at companies with failed say-on-pay votes.

As to the investors’ evaluation processes, the paper concludes that:

investors were extremely thoughtful in how they assessed executive compensation programs, considering multiple factors and sources, performance over a number of years, and focusing on total shareholder returns;

investors that relied more heavily on proxy advisory firms did so in part because of resource constraints;

resource and staffing constraints were also cited as causing many investors to focus on outlier companies; and

many investors plan to revisit and potentially revise their voting guidelines in the future.

The paper also found that the factors that most frequently contributed to investors voting against executive compensations programs included:

the presence of a disconnect between pay and performance;

poor pay practices;

poor disclosure practices; and

inappropriately high levels of compensation for the company’s size, industry and performance.

The above are only a few of the paper’s key conclusions; the full paper is posted below, it’s a quick and easy read and definitely worth the time.